African Distillers Limited (Afdis) posted a loss of $932 200 for the full-year ended June 2011 compared to $1 536 798 last year and expects to return to profitability in the year ahead.
The company manufactures and sells branded wines and spirits.
In a statement accompanying the company’s financial results, Afdis said during the period under review, cash generation remained tight as working capital was used to fund restructuring costs.
It noted that working capital problems constrained production volumes as the company was unable to fully fund raw material requirements.
“Second-half sales volumes improved after changes to the excise duty took effect. A 3% shortfall over prior year volumes at half-year was converted to a 10% gain by year end,” the company said in a statement.
“A resurgence in sales of premium products together with lower overheads enabled the company to significantly increase margins.”
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Afdis recorded a 32% increase in sales for the year ended June 30 to $19,4 million from $14,7 million last year same period.
The company was able to post the increase due to sales increase of 10% during the period under review.
Afdis said the year under review was used for consolidation and to reposition the company in the market.
Gross margins for the company went up to 29% rom 20% last year, while earnings before interest tax depreciation amortisation (EBIDTA), was at $0,29 million from $2,15 million last year.
EBIDTA is an approximate measure of the company’s operating cash flow based on the company’s income statement.
The company said upgrade to its distribution network and appointment of sales representatives countrywide was complete and should enhance execution and increase sales.
“The company is in a strong position to take advantage of further improvement in the economic climate,” said Afdis.
The company’s re-organisation cost amounted to $742 000 from $926 000 last year.